Australian emissions rise after carbon tax repeal: report

Reuters Staff

3 Min Read

(Reuters) - Carbon emissions and electricity demand in Australia have risen in the two months since the government repealed a tax on emissions, bucking a nearly six-year long trend of decline, an energy consultancy said on Thursday.

Consultancy Pitt & Sherry, which tracks electricity use and emissions in Australia's National Electricity Market (NEM), said emissions would continue to grow unless new policies were introduced.

Emissions growth in the past two months was equivalent to an annual increase of 0.8 percent, Pitt & Sherry said in a report.

The rise was caused by increased electricity demand, where a drop in renewables was replaced by more generation from black and brown coal power stations, according to the report.

The upswing marked a change from a steady decline in emissions from electricity generation since they peaked in December 2008, driven by lower demand and a rising share of renewables.

Australia's conservative government in July repealed a tax that had forced around 300 of the country's biggest emitters to pay for their CO2 emissions.

Last month, a government-commissioned report recommended Australia to effectively end its Renewable Energy Target (RET), a scheme designed to ensure that 20 percent of its electricity would be generated from renewable sources by 2020.

Australia could now fail to meet its target of cutting emissions to 5 percent below 2000 levels by 2020 unless new policies are implemented, Pitt & Sherry said.

"Had electricity emissions remained at the levels of June 2014, very little further reduction would have been needed for Australia to meet its (very modest) politically bipartisan target," the report said.

"However, the change in trends ... plus the reduction in gas generation expected in the near future, would, if maintained mean that the required emissions reductions would have to be achieved from other sources and by other means."

The office of Environment Minister Greg Hunt did not respond to emailed requests for comment on the report.

The government plans to implement a new set of climate policies, built around a A$2.55 billion ($2.38 bln) fund that would pay emitters to reduce their CO2 output.

But a number of reports have concluded that the new policy would fail to meet its objectives unless much more money is invested, and it remains uncertain whether the plan would make it through Senate.